TaxTMI 
TaxTMI 
2024 (3) TMI 1189
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....ial portion of the goods imported was sold by the appellant as 'branded Petrol', for which the higher CVD was payable as per Sl.No. 70(ii) of the said Notification. This resulted in short payment of Countervailing Duty (CVD). 1.2 The relevant Sl.No. 70 of the Notification No. 12/2012-CE dated 17.03.2012 and the corresponding rates of duty are shown hereunder for ease of reference:- Sl. No. Chapter or heading or sub-heading or tariff item of the First Schedule Description of excisable goods Rate Condition No. (1) (2) (3) (4) (5) 70 2710 Motor spirit commonly known as petrol,- (i) Intended for sale without a brand name; (ii) other than those specified at (i) • 1.20/Ltr. • 7.50/Ltr. 35/2012-CE dtd. 14.09.2012 • 2.70/Ltr. • 3.85/Ltr. 22/2014-CE dtd. 12.11.2014 • 4.95/Ltr. • 6.10/Ltr. 24/2014-CE dtd. 02.12.2014 • 8.95/Ltr. • 10.10/Ltr. 03/2015-CE dtd. 16.01.2015 • 5.46/Ltr. • 6.64/Ltr. 12/2015-CE dtd. 01.03.2015 • 9.48/Ltr. • 10.66/Ltr. 04/201....
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....er Sl.No. 70 (i) of Notification No. 12/2012-CE dated 17.03.2012 and the rest of the quantity was declared as 'intended for sale without a brand name' under Sl.No. 70(i) of the said Notification. The appellant later had voluntarily paid differential duty of CVD along with interest by Demand Draft dated 19.07.2016 and 27.07.2016. The Department was of the view that the appellant has mis-declared the goods and has violated the conditions of the Notification for the reason which the goods imported are liable for confiscation. The Show Cause Notice dated 05.04.2017 was issued under Section 18 read with Section 124 of the Customs Act, 1962, by DRI proposing (a) to deny the concessional rate of CVD claimed by them at the time of import (b) to finalise the provisionally assessed Bills of Entry by charging CVD at the rate prescribed under Sl.No. 70(ii) of Notification No. 12/2012-CE dated 17.03.2012 (c) consequent to finalisation of Bills of Entry, proposing to recover the higher amount of CVD along with interest (d) to appropriate the amount already paid by the appellant (e) to hold the goods liable for confiscation under Section 111(o) of the Customs Act, 1962 (f) to impose penalty under....
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....ngs' V. I confiscate the impugned goods of the declared CIF value of Rs.75,50,64,238/- (Rupees Seventy Five Crore, Fifty Lakh, Sixty Four Thousand, Two Hundred and Thirty Eight only), as detailed in "Annexure-A to the Show Cause Notice dated 05.04.2017, assessed provisionally, under Section 111(0) of the Customs Act 1962; However, I given an option to redeem the same on payment of fine of Rs.50,00,000/- (Rupees Fifty Lakhs only) under Section 125 of the Customs Act, 1962; VI. I impose a penalty of Rs.38,00,000/- (Rupees Thirty Lakhs only) under Section 112 (a) of the Customs Act, 1962, on the importer for their acts of omissions and commissions, as discussed above." 2.1 The Ld. counsel Shri Harish Bindhumadhawan appeared and argued on behalf of the appellant. It is submitted that though the Show Cause Notice is issued by DRI, the appellant is not contesting in this appeal the issue as to whether the Show Cause Notice issued by DRI is valid and proper. The appellant has filed an Affidavit to this effect on 19.06.2023. It is also submitted that the appellant is not contesting the confirmation of enhanced CVD or the appropriation thereof and is only contesting the....
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....nce of Show Cause Notice for differential duty, demanding confiscation and penalty is unsustainable as neither the said provision nor Customs (Finalisation of Provisional Assessment) Regulation, 2019 provides for the same. The Ld. counsel drew assistance from the decision rendered in the case of S. Patnaik Vs. Commissioner of Customs [2000 (118) ELT 502 (Tribunal)] wherein it has been held that Section 18 neither provides for issuance of Show cause Notice nor for imposition of penalty. The Ld. counsel stressed that the Department ought not to have issued the Show Cause Notice for recovery of differential duty, confiscation of goods and imposition of penalty without passing an order finalising the assessment of the subject Bills of Entry. More specifically, without finalization of assessment, the present proceedings of confiscation and imposition of penalty under Section 111, 112 and 114 of the Act ibid ought not to have been invoked. The Show Cause Notice itself is premature for this reason and without authority of law. Following cases were relied:- i. Jaju Petro Chemical P. Ltd. vs. Commissioner of Customs (Port) & Ors., [2017 (7) TMI 633-CALCUTTA HIGH COURT] ii.....
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....would be eventually sold as branded. 2.6 The Circular No. 1085/06/2022-CX dated 31.10.2022 issued by CBIC was relied upon by the Ld. counsel to support the arguments. It is submitted that the said Circular has taken note of the difficulties faced by OMCs as to the payment of excise duty on unblended Motor Spirit. In the said Circular to ensure smooth implementation of the differential duty on blended Petrol some procedures have been prescribed by the Board. It is stated in the Circular that the Central Excise duty has to be paid on Motor Spirit at the refinery stage. Where the Motor Spirit is cleared, as intended for retail sale after blending, the manufacturers / refineries shall remove such Motor Spirit to the depots / terminals by paying Central Excise duty as applicable for blended Motor Spirit. The Circular also gives procedures to be followed while removing Motor Spirit as intended for retail sale for blending. 2.7 The Ld. counsel submitted that the situation is analogous to the import of Motor spirit. At the time of import, the appellant is not able to estimate the quantity that they may sell after branding by adding additives to the imported Spirit. It is only after f....
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....ent of duty. The appellant at the time of import had availed the concessional rate of CVD for the reason that they could not estimate the quantity that they would be selling after branding. This is because of the practical difficulties in the field of import and clearance of Motor Spirit. The appellant had imported the Petrol with bonafide intention to sell them as unbranded. However, due to change in demand, which occurred post import, they sold them as branded. There was no malafide to evade payment of duty. The Ld. counsel prayed that the confiscation of goods, imposition of redemption fine and penalties may kindly be set aside. 3.1 The Ld. Authorized Representative Smt. Anandalakshmi Ganeshram appeared and argued for the Department. It is submitted that the appellant has wrongly availed the concessional rate of duty under Sl.No. 70(i) of Notification No. 12/2012-CE dated 17.03.2012. The present imports were made during the period 2013 to 2016. All the 10 consignments were assessed provisionally pending investigations into the relationship between the importer and the supplier by SVB of Customs, Chennai. The appellant voluntarily paid up the short paid duty (CVD) along with i....
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....ire any interference. 4. Hear both sides. 5.1 The Show Cause Notice in the present case is issued by DRI. The issue whether the Show Cause issued by DRI is valid and proper, is pending before various higher forums. The appellant has filed an Affidavit to the effect that they are not contesting the issue as to whether DRI is the proper officer for issuing the Show Cause Notice in this appeal. The said Affidavit is taken on record. 5.2 From the operative portion of the impugned order, it can be seen that the assessment has been finalised by confirming the enhanced CVD and also appropriating the amount already paid by the appellant. The Ld. counsel for the appellant has submitted that the appellant is not contesting the payment of differential amount of CVD and is limiting their dispute in this appeal on the confiscation of goods, imposition of redemption fine and penalties. 5.3 The foremost argument put forward by the Ld. counsel is that the assessment being provisional, the order for confiscation of the goods and imposition of redemption fine and penalties is against the provisions of law. In the case of AS Syndicate (Warehousing) P. Ltd. (supra), the Hon'ble jurisdictio....
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....the petitioners have also been directed to show cause why the goods should not be held confiscable and why penalty should not be imposed. There could be no question of confiscation, penalty or interest till after final assessment. 21. Mr. Datta's argument of there being an element of finality attached to provisional assessment, is difficult to appreciate. There can be no question of any demand, and in any case no interest or penalty until final assessment. In any case the petitioners accepted that provisional assessment had correctly been made under Heading 2106.90." 5.4 The Hon'ble High Court of Bombay in the case of Commissioner of Customs (Import), Mumbai Vs. Mahesh India [2006 (7) TMI 306 - BOMBAY HIGH COURT] while considering the main issue as to whether the Show Cause Notice dated 22.03.1993 issued by DRI under Section 28 read with Section 124 of the Customs Act, 1962 is valid and proper had observed that the assessment being only provisional, the Show Cause Notice is not maintainable. It was held that the Show Cause Notice issued under Section 28 when the goods have not been finally assessed is bad in law and not maintainable. The relevant Paragraphs reads as und....
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....reof. He submits that, the authorities are entitled to invoke Section 28 of the Act of 1962, if and only if, the petitioner is guilty of not paying the levy or short-paying the same or for the reasons specified in Section 28 thereof. None of the grounds available to invoke Section 28 of the Act of 1962 exists in the facts of the present case. The levy payable by the petitioner is yet to be adjudicated upon, for the petitioner to have defaulted in payment of the same and Section 28 being invoked. . . . 15. The petitioner had imported what is claimed to be slack wax. DRI had initiated an investigation on the suspicion of undervaluation. Such investigation conducted by DRI was commodity specific rather than importer specific. This fact appears from the impugned show cause notice as also the affidavits of the authorities. 16. The records made available to Court establish that, the petitioner had applied under Section 18(1) for the purpose of assessment. Section 18(1) of the Customs Act, 1962 permits the importer, where he is unable to make self-assessment, to make a request to the proper officer for assessment. In the present case, the petit....
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....uring Co. Pvt. Ltd. vide its Order dated 8-3-1990 has held that the Department is empowered to obtain such facts as are necessary to finalise provisional assessment. Similarly, the Supreme Court in the case of Commissioner of Customs, Mumbai v. Shibani Engg. Systems [1996 (86) E.L.T. 453 (S.C.)] has held that when the manufacturers invoice is not produced, price of similar goods can be taken for assessment purposes. Finally the Hon'ble Supreme Court [1995 (78) E.L.T. A221 (S.C.)] in the case of Shyam Antenna Electronics Ltd. [2003 (162) E.L.T. 898 (T) = 1994 (55) ECR 497] upheld the Tribunal's order wherein it was decided that for price of contemporary imports of identical goods from same manufacturer being higher, declared prices to be disregarded. The judgment of the Hon'ble Supreme Court in the case of M/s. Eicher Tractors Ltd. [2000 (122) E.L.T. 321 (S.C.)] is not applicable to the facts of the present case since this is not a case of discount. 6. Accordingly, we uphold the valuation but set aside the penalties since this is a case of finalisation of provisional assessment." 5.7 In the present case, the Show Cause Notice is issued under Section 18 read with Section ....
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....irit has been brought to our notice. The said Circular reads as under:- " As part of Budget 2022-23, an additional Basic Excise Duty @ Rs. 2 per litre was levied on unblended motor spirit (commonly known as petrol) intended for retail sale and the said duty rate was to be applicable w.e.f. 1st October, 2022. The date of effect was deferred to 1st November, 2022 vide Notification No. 31/2022-Central Excise, dated 30th September, 2022. The levy of additional Basic excise duty on unblended motor spirit was introduced to promote blending in the country. 2. Representations have been received seeking clarification on the mechanism for levy of additional central excise duty on unblended motor spirit, particularly as the blending of duty paid motor spirit with duty paid ethanol takes place at depots after clearance from refinery. The difficulty faced by the OMCs is that at the time of clearance of motor spirit from the refinery, the same are cleared as intended for retail sale as blended but they are not able to estimate the quantity that will eventually be sold as unblended. 3. Therefore, to ensure smooth implementation of the differential duty, the following pr....